Exam 9: Application: International Trade

Figure 9-27 The following diagram shows the domestic demand and supply curves in a market. Assume that the world price in this market is $20 per unit. -Refer to Figure 9-27. With no trade allowed, how much are consumer surplus, producer surplus, and total surplus?

Figure 9-17 -Refer to Figure 9-17. Without trade, consumer surplus is

Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. -Refer to Figure 9-23. With free trade allowed, this country

When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

Figure 9-29 The following diagram shows the domestic demand and domestic supply curves in a market. Assume that the world price in this market is $1 per unit. -Refer to Figure 9-29. Suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how many units will domestic consumers demand and how many units will domestic producers supply?

Figure 9-15 -Refer to Figure 9-15. For the saddle market, area B represents

In 2008, the Los Angeles Times asked members of the American public whether free international trade has helped or hurt the economy. Of those surveyed,

In principle, trade can make a nation better off, because the gains to the winners exceed the losses to the losers.

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. In the absence of trade, the equilibrium price of coffee in Guatemala is

Figure 9-28 The following diagram shows the domestic demand and domestic supply curves in a market. -Refer to Figure 9-28. Suppose the world price in this market is $6. If the country allows free trade, how much is consumer surplus?

Figure 9-12 -Refer to Figure 9-12. Consumer surplus after trade is

Figure 9-23 The following diagram shows the domestic demand and domestic supply for a market. Assume that the world price in this market is $120 per unit. -Refer to Figure 9-23. Producer surplus with free trade is

Figure 9-1 The figure illustrates the market for coffee in Guatemala. -Refer to Figure 9-1. In the absence of trade, total surplus in the Guatemalan coffee market amounts to

The infant-industry argument

When a country that imports a particular good imposes a tariff on that good,

Figure 9-10. The figure applies to Mexico and the good is rifles. -Refer to Figure 9-10. When trade takes place, the quantity Q2 - Q1 is

Import quotas and tariffs make domestic sellers better off and domestic buyers worse off.

If a country's domestic price of a good is lower than the world price, then that country has a comparative advantage in producing that good.

Economists feel that national security concerns never provide a legitimate rationale for trade restrictions.

Figure 9-16. The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. -Refer to Figure 9-16. The deadweight loss created by the tariff is represented by the area